En Espanol

Obamacare Sales Tax Will Cause Premiums to Rise By $10k Over 10 Years

Abby Coleman 12/07/2012

The Washington Examiner

Joel Gehrke

President Obama’s health care overhaul contains a tax that will drive up premiums for individuals, families, and even Medicare Advantage beneficiaries, according to a new study released by America’s Health Insurance Plans (AHIP).

Obamacare “imposes a new sales tax on health insurance that starts at $8 billion in 2014, increase to $14.3 billion in 2018, and will continue to increase each year,” AHIP explains to introduce the study on the Health Insurance Tax (HIT). Although the government taxes the health insurance providers, the Congressional Budget Office acknowledged in 2009 that the cost “would be passed on to purchasers and would ultimately raise insurance premiums by a corresponding amount.”

The AHIP study predicts that, on average, individuals buying insurance outside a company policy will pay an extra $2,171 over 10 years, or $5,140 over ten years if they buy a family plan. Employees at small businesses that do not self-insure will see their premiums rise $2,794 for individual plans and $6,883 for family policies. If you work for a large company your premiums will rise $2,636 for an individual policy, compared to $7,186 for a family policy.

AHIP expects Medicare Advantage premiums to rise by $3,604 over ten years. Why? “[F]or each dollar paid in taxes, an additional $1.54 in premiums must be collected,” the study suggests.

The actual premium increase varies by state. “In general, states that have a higher proportion of their population in self-insured plans will pay a smaller proportion of the taxes,” AHIP explains. New Yorkers who buy family policies in the individual market will see their premiums rise $9,942 over ten years, for instance. The study predicts an average increase of $9,221 for West Virginians who work at small businesses.

A group of stakeholders have formed a Stop the HIT coalition calling for the repeal of the Health Insurance Tax

“For the millions of small businesses and their employees across the country, the financial burden added by the HIT will be too much to bear,” said Amanda Austin, Director of Federal Public Policy at the National Federation of Independent Business (NFIB), a leading Stop the HIT Coalition Member. “Washington needs to understand that taxing small businesses, the nation’s number one job creator, has a direct consequence – higher costs.”

1 Comments

Gene CDecember 30, 2013

Having compared and signed up for this “affordable health care” plan of Obamas’ I quickly came to the conclusion that it’s junk insurance. The deductibles and co-pays amount to a sure fire loss for those on the edge. Why should the insurance deductibles more than double for seniors who aren’t going to have any children? Is this yet another marriage tax? Those people who are on modest incomes like Social Security and/or unemployment, like in our case, don’t qualify for assistance, god forbid we should have a house payment because the deductibles will put us under. Obama also told us we could keep our doctors, along with our current health insurance which are both loads of … . We had to pick a certain plan in order to keep ours because of Preferred Provider requirements and that plan wasn’t our first choice. Another false hood is that Obama said “No one has declared bankruptcy over $7.500”. But when you add that amount to an already financially stressed household budget in can and will be the straw that breaks the camels’ back. There will be many that have to forgo seeing doctors and surgeons who work at hospitals because they don’t have a few thousand dollars lying around and god knows the cost of medical treatment is totally out of control. One might ask why? Well they have to cover the cost of their own insurance and it’s at crazy levels as well.
I’ll be heard again at voting time.

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